GRANITE FALLS -- The Court of Appeals provided the Yellow Medicine East School District a complete victory in a lawsuit filed by two taxpayers over $10 million worth of health and safety improvements the district made.

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District taxpayers Scott Wintz and Patrick McCoy had challenged whether the district could issue bonds for the improvements without holding a voter referendum.

A district court ruling issued one year ago had given the school district a partial victory. Judge Randall Slieter found that $7,261,856 worth of improvements to the school buildings in Granite Falls met requirements under a state statute that allows health and safety improvements to be financed by school districts without a referendum.

The judge ruled that $2,807,121 worth of work -- for hot water piping and a sprinkler system -- did not meet the exception provided by the statute.

The Court of Appeals reversed this determination, and found that the work to add hot water piping to a ventilation system to improve air quality in classrooms qualified.

It likewise found that work to add the sprinkler system for fire safety purposes qualified.

The court stated that the uncontested evidence in the case "establishes that the hot-water piping is part of the ventilation system, and therefore the district court clearly erred by finding otherwise.''

The appeals court likewise used terms such as "common sense" and "reasonable'' to support the school's decision to install a sprinkler system as a health and safety improvement.

Superintendent of Schools Al Stoeckman said the plaintiffs have a 30-day period in which they could appeal to the Supreme Court. If they do not, he said the district will be able to move forward and pay the final bills resulting from the project.

The district has paid all of the contractors involved in the project, which was completed one year ago. However, the project engineer and consultants, Energy Services Group of Wayzata, had agreed to go without its compensation until the litigation is resolved. The district owes the company $710,246.

The district had also withheld selling some bond issues for the project while the litigation was pending. It will do so if the case is not appealed.

The superintendent said the district undertook the health and safety project while it qualified for low-interest financing through federal and state programs. It calculates it saves $4 million in interest payments as a result.

Had the district not prevailed in the lawsuit, it would have had the challenge of re-financing portions of the work.

The district had been hopeful of prevailing in court.

Attorney Eric Quiring, of Ratwik, Roszak and Maloney, Minneapolis, represented the school. "The fact is a lot of districts in the state are doing these projects, and doing them in this manner and the Department of Education has approved them,'' he said.

The superintendent said it had followed the qualification process and gained Department of Education approval before proceeding with the financing and work.

Other schools in the area, including Renville County West and MACCRAY, have recently undertaken similar health and safety improvements without a voter referendum while this lawsuit was pending, he noted.

Had the school not prevailed in this lawsuit, it would almost certainly have attracted a lot of attention in the state, said Quiring. In this case, the court clearly upheld the status quo.

The plaintiff's attorney, Kevin Stroup of Marshall, was out of town and unavailable for comment Monday.